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Markets Rally on Promising Vaccine Report and Biden Win, Theater and Theme Park Shares Soar

Shares of Netflix, Amazon, Roku and other 'stay at home' companies fall

Wall Street stock market
AP

UPDATED, 4:05 p.m. ET: U.S. markets surged Monday on Pfizer’s announcement that its COVID vaccine was more effective than expected and after the weekend news that Joe Biden was the projected winner of the U.S. presidential election. Most media and entertainment stocks rode the rally higher but big tech companies declined in late-day trading.

After jumping as much as 5.6% in early trading, the Dow Jones Industrial Average pulled back to end the day gaining 834.70 points, up 2.95% to 29,158.10. That was the index’s highest mark since Feb. 20 — before the COVID pandemic outbreak swept across the U.S. The S&P 500 closed up 1.2%, a two-month high, while the tech-heavy Nasdaq Composite Index fell 1.53%.

Stocks of theater chains, which have been debilitated during the pandemic, soared on the positive vaccine news. AMC Entertainment, which has faced the prospect filing for bankruptcy, finished the day up 51%; Cinemark climbed 45%; National CineMedia rose 44.4%; and Imax jumped 18.6%.

Theme park stocks also surged. Disney closed up 11.9%, as investors eyed a bigger reopening of the company’s theme parks. Also gaining were Six Flags Entertainment (+17.7%) and SeaWorld Entertainment (+13.6%).

By the same token, so-called “stay at home” stocks that have benefited from coronavirus lockdowns — including Netflix — fell Monday on Pfizer’s vaccine testing news. Netflix dropped 8.6% for the day, while videoconferencing provider Zoom fell 17.4% and fitness brand Peloton closed down 20.3%. Shares of Roku, the over-the-top device and platform company, slumped 12.4% after a jump last week on a 43% year-over-year increase in active accounts for Q3 to 46 million.

Media and telecom stocks recording gains Monday included Comcast (+6%), AT&T (+3.1%), Fox Corp. (+1.2%), AMC Networks (+4.5%) and Discovery (5.7%). Shares of Lionsgate, whose stock got a lift last week after beating Wall Street earnings forecasts and announcing layoffs in its film group, closed up 7.2% Monday. ViacomCBS was one of the media sector’s few losers, closing down 0.85%.

Shares of big tech companies, which have posted several quarters of strong gains fueled by COVID-19, missed out on Monday’s broader bounce. Amazon and Facebook stocks fell 5% Monday. Apple ended Monday’s trading down 2% while Alphabet (Google’s parent) was essentially flat (+0.07%).

On Monday before U.S. markets opened, Pfizer and partner BioNTech SE announced that a COVID-19 vaccine candidate they developed was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis. Shares of Pfizer were up 6.5% in early trading Monday.

The companies said they are “continuing to accumulate safety data” and currently estimate that a median of two months of safety data following the second and final dose of the vaccine candidate — which is the amount of safety data specified by the FDA in its guidance for potential Emergency Use Authorization — will be available by the third week of November. Based on current projections, Pfizer and BioNTech said, they expect to produce up to 50 million vaccine doses globally in 2020 and up to 1.3 billion doses in 2021.

The Pfizer-BioNTech vaccine announcement came after the U.S. had registered nearly 10 million coronavirus cases and was averaging more than 100,000 new infections daily, according to Johns Hopkins University’s coronavirus resource tracker. More than 237,000 Americans have died from COVID.